A bad credit history is like having contracted an infectious disease. At least this is what most lenders perceive. Any requests for personal loans by people with a bad credit history are generally declined. They are charged an extravagantly high rate of interest, if advanced personal loans.What these lenders fail to recognize is that people who are currently rated as a bad credit case were sometimes having a good credit history. Some acts of past, which were sometimes inevitable, became reason for theirs being tarnished with bad credit.
It will be illogical to punish people for acts of past. Besides there are few means to guarantee that a person otherwise rated as a perfect credit case, may default on loan.
Lenders have slowly started accepting fact. The growing number of people falling in trap of bad credit has brought home fact that they cannot do without doing business with these people.
Besides opening practically every loan for people with bad credit, more and more loan products have come up to cater to specialized group. There are similar options for people with bad credit, as for people with a good or average credit.
Bad credit personal loans are used for a variety of purposes like buying a car or going on a holiday. They are also widely used in debt consolidation.
Bad credit becomes irrelevant if person has and is ready to keep some asset as collateral. The main idea behind refusal to people with bad credit is that they fear that default will be repeated. With a collateral to back personal loan, lender is assured that loan would not be defaulted. The borrower knows that he will have to lose asset, generally home, if he defaults on loan.
The requirement of collateral can be done away with in case of an unsecured personal loan. Lenders rarely offer such loans. A good credit history is a pre-requisite in such loans. But, there are always some lenders who take consideration of your case. Lenders accept borrowers with a bad credit history because of inevitable reasons.